Productivity Commission's inquiry into Australia's intellectual property arrangements

The Productivity Commission released its draft report on intellectual property arrangements on 29 April 2016. APRA AMCOS responded in a draft submission on 3 June 2016.

The Productivity Commission has since released its final report on 20 December 2016. APRA AMCOS responded in final submission on 14 February 2017.

We are extremely concerned by the report, and believe its recommendations and findings are short-sighted in terms of economic policy and disrespectful to Australian music creators.

Key points in our submission include: 

TERM OF COPYRIGHT
We reject the suggestion that the optimal term for copyright protection should be closer to 15 to 25 years after creation. The Productivity Commission’s finding on reducing copyright term and scope is perhaps the most radical made by a public body in respect of copyright law in Australian history. 

Even a cursory look at the ongoing popularity of the back catalogues of successful artists from the 1960s and 1970s shows that the commercial life of a musical work extends far beyond the 15 to 25 year period estimated by the Commission. The launch of music subscription services has only served to strengthen this argument.

GEO-BLOCKING
We believe that the draft report has failed to understand the important commercial realities of geo-blocking.

There are many valid reasons why a company will want to offer different terms and charge different prices around the world including operating costs, tariffs and taxes, currency fluctuations and local advertising.

Fundamentally, controlling the region in which a consumer accesses content is beneficial to rewarding the creator, and circumventing geo-blocks has the potential to discourage investment in local content creation.

FAIR USE
We are opposed to introducing a Fair Use regime into local Australian law. Despite what is suggested in the draft report, innovation and productivity do not require free use of copyright material. Most user-generated content is not innovative: it is derivative at best. Innovators who complain about the stifling effect of copyright are generally those who do not want to pay for the creative work of copyright owners.

The report’s proposal to import a broad American-style Fair Use system to Australia is inappropriate, given clear differences between jurisdictions, economies and industries.The American and Australian systems are notably different in many respects, and one cannot (and should not) rely on American precedent to make decisions about Australian copyright law.

SAFE HARBOUR SCHEME
We oppose the recommendation to extend the Safe Harbour Scheme to cover a broader set of online service providers.

There is a clear distinction between someone who provides a means of communication (such as an internet service provider) and someone who provides content. We believe that the Safe Harbour Scheme should retain the distinction.

Entities in the business of providing content exercise a different level of control over the material on their sites or networks. For this reason, sites that facilitate activities such as social networking and video sharing should not be included in the Safe Harbour Scheme.

ILLEGAL DOWNLOADS
We do not agree that timely and cost-effective access to copyright-protected works is the most efficient and effective way to reduce illegal downloading.

Copyright infringement does not occur because of a lack of availability or an unreasonable price point. It is the result of some consumers’ unwillingness to pay for content they can readily obtain free of charge.

In Australia, consumers have access to about 20 different digital music service providers that are licensed, and which offer virtually the world’s repertoire of music either at no cost (ad-funded) or at very little cost. As consumers can choose between any of these options (or purchase digital or physical products), one would think that there would be no need for the piracy of music. But this is not the case.

Data from comScore and Nielsen, (available in the IFPI Digital Music Report 2015) estimates that 20% of fixed-line internet users worldwide regularly access services offering copyright infringing music. IFPI estimates that in 2014, there were 4 billion music downloads via BitTorrent alone, the vast majority of which were illegal.

APRA AMCOS FINAL SUBMISSION
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